Speaking during a Tea Party-style protest this afternoon at WaterPlace Park, Stenhouse said a New Hampshire-style model would energize Rhode Island’s economy.

“Next month we’ll be releasing a report that proposes to eliminate the sales tax — zero-point-zero,” Stenhouse said to cheers from a throng of about 75 people galvanzied by the Rhode Island Hospitality Association. “How much would this benefit your business? It’s time to reverse course and reduce taxes.”

Eliminating the sales tax would seem to be a non-starter at the General Assembly, considering Rhode Island’s perennial budget deficits. But the proposal could help to focus a debate on tax policy.

During the Tea Party event, restaurateur John Elkhay (shown above) and other critics sharply criticized Governor Lincoln Chafee’s proposal to raise the state meal and beverage tax from 8 percent to 10 percent. They said it will hurt their businesses and the state’s economy as a whole.

Chafee has said he hopes growing state revenues will make it possible to cut or eliminate the two percentage point increase in the meal and beverage tax.

Wasn’t the current sales tax “temporarily” increased due to the S&L crisis and was to be lowered when that crisis was over, then never was? I’ve heard that, but I wasn’t here at the time so don’t know if that is true. I don’t know if we should raise the meals tax or not to get through this crisis, but I put little faith in the idea that it would be temporary. They could always put a sunset clause on the increase I suppose.

“Wasn’t the current sales tax ‘temporarily’ increased due to the S&L crisis and was to be lowered when that crisis was over, then never was?”

That’s basically true…that was the “brainstorm” of then Governor Bruce Sundlun, who basically refused to raise state income taxes & just cut many state services instead. VT did the same thing a number of years ago under Governor Jim Douglas…raised the state’s sales tax rate one point “temporarily” to combat rising property taxes, then the very same Governor ran against the state legislature for raising the sales tax, like he asked them to do in the first place. Good stuff…ugh…

“Speaking during a Tea Party-style protest this afternoon at WaterPlace Park, Stenhouse said a New Hampshire-style model would energize Rhode Island’s economy.”

Geez, people really need to try & learn about what they are attempting to talk about before they open their mouths. The “New Hampshire-style model” is toll roads that will never go away, high rates of taxation on businesses (including the hospitality industry…at some 9% right now!), taxes on real estate, interest & dividends, gambling, communications, vehicle rentals, sometimes wildly desperate property taxes (some of the nation’s highest) from locality to locality, and scant public services. In short, NH’s tax system is wildly regressive, and it struggles to even keep pace with economic growth:

Hey Mr. Elkhay, thanks so much for attending this event…I won’t be going to any of your restaurants ever again! 🙂